In today’s briefing:
- Toyo Construction (1890) – Everyone Hits Pause
- Singapore Airlines (SIA SP | BUY | SGD: 8.07): Nov’ 2023 Op Stats, More Reason to Be Bullish
- Inox India IPO Trading – Hot Demand for Cryogenics
- MillerKnoll, Inc. – 2QFY24 Earnings After Close
- Amaero International Ltd – Several Milestones Tracking Ahead of Schedule
- Steelcase, Inc. – 3QFY24 Earnings: Margins Drive EPS Upside
- Steelcase, Inc. – Tweaking Estimates: Margins Improve, Sales Moderate
- Chargeurs Tender Offer
Toyo Construction (1890) – Everyone Hits Pause
- In September, YFO (Yamauchi Family Office) upped its Tender Offer proposal to ¥1,255/share. YFO presented. The Toyo Special Committee met, interviewed, examined, deliberated, then last week rejected YFO’s proposal.
- The rejection was a three-parter. First, they rejected YFO for not bringing management/ownership experience. Second, they said the proposal didn’t add enough value. Third, the price was too low.
- There were no metrics against which to measure anything. And now Toyo has apparently decided to withdraw its Tender Offer Proposal.
Singapore Airlines (SIA SP | BUY | SGD: 8.07): Nov’ 2023 Op Stats, More Reason to Be Bullish
- Singapore Airlines (SIA SP) (SIA) November operating statistics were good, passenger load factor rose by 1.9ppt YoY to 87.8%, and cargo load factor rose by a similar quantum
- Market observations suggest yields should remain at high levels and cost items such as fuel and USD-denominated items on a favorable downtrend
- If this performance continues, SIA will beat consensus easily. We recommend BUY with a TP of SGD8.07 – pegged to 10x FY24 PE. (+26% UPSIDE)
Inox India IPO Trading – Hot Demand for Cryogenics
- INOX India Limited (INOX IN) raised around US$175m in its Indian IPO, after pricing the deal at INR660/share. It will begin trading tomorrow on 21st Dec 2023.
- Inox India is a manufacturer of cryogenic equipment. As per CRISIL, the firm was the largest Indian exporter of cryogenic tanks in terms of FY23 sales.
- We have looked at various aspects of the deal in our previous notes. In this note, we talk about demand and trading dynamics.
MillerKnoll, Inc. – 2QFY24 Earnings After Close
- MillerKnoll reports 2QFY24 earnings after market close on Wednesday, December 20, and will host its management conference call at 5:00 pm ET.
- WTR is modeling EPS of $0.55, the midpoint of guidance, on revenue of $987 million. Consensus is $0.54, with an estimate range of $0.52-0.56.
- Order trends. We are modeling orders in the Americas at +13.9% versus a poor year-ago quarter of -17.3%.
Amaero International Ltd – Several Milestones Tracking Ahead of Schedule
- Amaero International Ltd (ASX:3DA) is a global specialist in advanced materials manufacturing for the defence, aerospace, and other industrial sectors.
- The company is developing a 1,000+-tonne-a-year critical metals alloy powder manufacturing facility in Tennessee, USA with its initial focus on producing refractory alloy powder, C103, a critical metal powder used in hypersonics weaponry.
- On December 19, the company provided an update to investors on its progress to date this month with several milestones tracking ahead of schedule.
Steelcase, Inc. – 3QFY24 Earnings: Margins Drive EPS Upside
- After Tuesday’s close, Steelcase reported 3QFY24 adjusted EPS of $0.30, ahead of our $0.25 estimate and consensus of $0.23.
- Revenue came in lighter than expected at $778 million versus our $804 million estimate and consensus of $796 million.
- Steelcase delivered another quarter of gross margin improvement at 32.4%, up 370 bps versus 3QFY23, and 46 bps above our estimate.
Steelcase, Inc. – Tweaking Estimates: Margins Improve, Sales Moderate
- This note revises our estimates for Steelcase following its 3QFY24 earnings call.
- In short, for 4QFY24, we up our margin assumption, moderate our revenue assumption slightly, and shave our adjusted EPS estimate by $0.01.
- Steelcase reported strong margins and steady orders in the 3QFY24 on Tuesday evening.
Chargeurs Tender Offer
CEO Michaël Fribourg, who controls almost 30% of the company through Colombus Holding, will launch a takeover bid for Chargeurs at €12 per share.
His aim is to achieve a majority stake while keeping the company listed.
The proposed price of €12 per share represents a premium of 36.2% to the wighted average share price over the last month and 50.5% over the last three months.
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